Pakistan seeks $500 million loan from ADB.

Byline: Shahbaz Rana

ISLAMABAD -- Pakistan has requested the Asian Development Bank (ADB) to approve a $500 million loan in budgetary support before June this year, as it faces difficulties in retaining foreign exchange reserves because of mounting external financing needs.

The request has been made to Werner Liepach, director general for Central and West Asia Department of the ADB, who is on a visit to Pakistan, a top official of the Finance Ministry told The Express Tribune.

The ADB official arrived in Pakistan 12 days before a scheduled visit of the International Monetary Fund's (IMF) new mission chief. Spanish born IMF mission chief is arriving on 26th of this month on his maiden visit to Pakistan, where he will stay for two days.

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Pakistan plans to request the IMF to send a staff level mission after the IMF-World Bank spring meetings next month, said a senior Finance Ministry official. If an agreement reached during staff level visit, the government will present the next year's budget on May 17 to include prior actions of a programme loan

Liepach met Finance Minister Asad Umar, Adviser to PM on Commerce Razak Dawood besides holding meetings with other key government officials.

His visit is aimed at finding new avenues for enhancing disbursements of loans to Pakistan and removing bottlenecks that are hindering releases of the previously approved loans.

However, it is unlikely that the Manila-based lending agency would accept the request in absence of a Letter of Comfort from the IMF. Pakistan's budgetary support remains suspended for last over two years due to deterioration in macroeconomic conditions.

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The ADB had approved the last budgetary support programme in June 2017 when it sanctioned $600 million loan for energy sector reforms. Pakistan requested the ADB to approve the $500 million first loan tranche under the Trade and Competitiveness Programme. The total programme size is $800 million but Islamabad wanted that at least $500 million be disbursed before June 30, officials added.

Pakistan's gross official foreign currency reserves stood at only $8.1 billion despite availing $6 billion from China, UAE and Saudi Arabia in past eight months.

The government has managed to compress imports and ensured double-digit growth in remittances but the measures are still not enough to meet its gross external financing...